Correlation Between Dyne Therapeutics and SpringWorks Therapeutics

Can any of the company-specific risk be diversified away by investing in both Dyne Therapeutics and SpringWorks Therapeutics at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Dyne Therapeutics and SpringWorks Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Dyne Therapeutics and SpringWorks Therapeutics, you can compare the effects of market volatilities on Dyne Therapeutics and SpringWorks Therapeutics and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Dyne Therapeutics with a short position of SpringWorks Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dyne Therapeutics and SpringWorks Therapeutics.

Diversification Opportunities for Dyne Therapeutics and SpringWorks Therapeutics

-0.52

Correlation Coefficient

Dyne Therapeutics  SpringWorks Therapeutics

Excellent diversification

The 3 months correlation between Dyne and SpringWorks is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Dyne Therapeutics and SpringWorks Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SpringWorks Therapeutics and Dyne Therapeutics is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Dyne Therapeutics are associated (or correlated) with SpringWorks Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SpringWorks Therapeutics has no effect on the direction of Dyne Therapeutics i.e., Dyne Therapeutics and SpringWorks Therapeutics go up and down completely randomly.

Pair Corralation between Dyne Therapeutics and SpringWorks Therapeutics

Considering the 90-day investment horizon Dyne Therapeutics is expected to generate 31.04 times more return on investment than SpringWorks Therapeutics. However, Dyne Therapeutics is 31.04 times more volatile than SpringWorks Therapeutics. It trades about 0.04 of its potential returns per unit of risk. SpringWorks Therapeutics is currently generating about 0.32 per unit of risk. If you would invest  1,166  in Dyne Therapeutics on May 19, 2025 and sell it today you would earn a total of  72.00  from holding Dyne Therapeutics or generate 6.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	47.62%
Values	Daily Returns

Dyne Therapeutics  vs.  SpringWorks Therapeutics

Dyne Therapeutics

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Dyne Therapeutics are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Dyne Therapeutics displayed solid returns over the last few months and may actually be approaching a breakup point.

SpringWorks Therapeutics

Risk-Adjusted Performance

Solid

Over the last 90 days SpringWorks Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, SpringWorks Therapeutics is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Dyne Therapeutics and SpringWorks Therapeutics

The main advantage of trading using opposite Dyne Therapeutics and SpringWorks Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dyne Therapeutics position performs unexpectedly, SpringWorks Therapeutics can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in SpringWorks Therapeutics will offset losses from the drop in SpringWorks Therapeutics' long position.

The idea behind Dyne Therapeutics and SpringWorks Therapeutics pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Share Portfolio module to track or share privately all of your investments from the convenience of any device.